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Finance Bill

My Lords, it is a great honour to have been appointed to your Lordships’ House. I am wearing a white rose of Yorkshire, which is strange because I have virtually no connection with Yorkshire. However, earlier today I was trying to help out at the memorial service of my very good friend Sir   Donald Thompson who died earlier this year. Don was a great Yorkshireman indeed, and he was much loved and respected on both sides of the House of Commons. My noble and learned friend Lord Lyell of Markyate and I have been out of the House of Commons since the 2001 general election. I do not know about my noble and learned friend, but I have certainly suffered severe political withdrawal symptoms. However, while I was out for a Parliament, I made the awful discovery that outside the Westminster village there are quite normal people with no interest in politics whatever. I am not sure that they do not form the majority of the electorate at large. In the short time I have been here, I have observed a great contrast between your Lordships’ House and the other place. The obvious difference is that no one here has any constituents or elections to face. The other great contrast is in the code of behaviour and the way in which one Member of this House treats another. There is a degree of politeness here which is totally unusual to someone previously in the House of Commons. That has not happened by accident. Good manners can be very much attributed to the self-regulation of your Lordships’ House. Members of this House have been trusted to regulate their own affairs. Replace that trust with a figure of authority, such as the Commons Speaker, and a new game comes into play. The question will then be how to challenge that authority. Only a minor number of Members of this House will play that game, but they will spoil it all for everyone else. I asked my Whip what topic I should use for my maiden speech. She said that it did not matter too much provided that it was non-controversial. I am pleased to know that I shall be doing everything I can to meet the wishes of my Whip. I always attributed any success I had in the other place to ingratiating myself with the Whips’ Office because I was told that that was   the way to get on. Eventually, my noble friend Lord Jopling, when he was Chief Whip in the first administration of my noble friend Lady Thatcher asked me to join the Whips’ Office. Presumably, that was evidence that all the frightful oiling-up had paid off. I am grateful for the remarks of my noble friend Lord   Wakeham about our time together when he was Chief Whip. I must pay an enormous tribute to him. I   remember, before he returned to the House of Commons, seeing him in Brighton hospital when the doctors were contemplating whether to amputate one or both of his legs. We should never forget the devastating impact that the Brighton bomb had on a number of people. I commend him for the courage which he has shown ever since and the way he came back from that traumatic experience. So I am still really ingratiating myself with the Whips’ Office. I do not know why I am doing so because the last flickers of ambition have died away. I can attribute it only to force of habit. The noble Lord, Lord Barnett, said that in the other place I had not shown much interest in Finance Bills. He is right, but I hope that he will take the view that a sinner that repenteth is somebody who should be welcomed. I have always had some interest in economics and hope to contribute on the subject in this House in the future. In the spirit of being non-controversial—I tend to try very hard to follow the instructions of my Whip—I should like to reiterate what the Minister said about the very courageous action of the Chancellor in giving independence to the Bank of England and allowing the Monetary Policy Committee to set interest rates in this country. That has been an extremely good policy. On the whole I do not think that too many people have great arguments with the interest rates set by the Monetary Policy Committee. They seem to have suited our economy extremely well. I had always thought that it was a thoroughly Conservative policy and was amazed that the suggestion was not taken up by previous Tory administrations. The other major area of policy where the nation should be grateful to the Chancellor is the role he played in keeping us out of the European single currency. I do not know how significant the rules were which the Chancellor created. It may have been more to do with the fact that opinion polls constantly indicated that the British people would not vote for the country joining the euro. There is no doubt that the Chancellor must have been very grateful that he was able to have an independent Bank of England setting his interest rates which suited the British economy, rather than having a European central bank setting the   interest rates which would not have suited our economy. We would be in a different position now if that had happened. Critics of the euro always said that it seemed very difficult to have the same interest rate operating for a large number of different economies, all operating in different ways across Europe. We were told, ““Well, what will actually happen is that we will see convergence in Europe and the economies will all come together””. There has been precious little convergence. What we have actually seen is that for old economies such as those of France and Germany the interest rates have been too high, and that for many of the emerging newer economies—for example, the economy of Spain—the interest rates have probably been too low. During my working life I seem to have encountered a number of people speculating in property in Dublin. There the name of the game has been to borrow inordinately large sums of very cheap euro money to buy properties in Dublin. We have seen a spectacular bubble in property prices in Dublin. Whenever I see my Irish friends and ask, ““Has the bubble finally burst?”” they say, ““No, it still has not burst. Prices are still as high as ever.”” It has been a spectacular increase. But that is one of the artificial problems that occurs in a newish economy. Ireland should probably have had higher interest rates. If you have a lot of cheap money then things like houses go roaring up in price, and that is what we have been seeing. Much more disturbing is what we have been seeing in the older economies of France and Germany. The ““No”” votes for the constitution have been blamed on a whole mass of different factors. People go on about immigration, about Turkey coming into the European Union, and about Anglo-Saxon methods of running economies. I suspect that it is all basically simpler than that. To quote President Clinton, ““It’s the economy, stupid””. That has really been the reason for the decisive ““No”” votes in France and the Netherlands. Not all of the problems facing those countries today can be blamed on their membership of the euro, but that certainly has not helped. We now see high unemployment and low growth in France and Germany, as well as growing feelings of national despair. This is extremely disturbing, because that is the basis on which extremism is bred. The object in the beginning of the European project’s founders was to try to avoid the re-emergence of extremists. It was designed to stop future wars in Europe. We have been producing precisely the opposite result because of this dangerous economic experiment that does not seem to have worked out at all. If one is speaking in a debate on the Finance Bill, it is right that one should make some reference to the Bill itself. I note that its purpose is to combat tax avoidance schemes. I was always told, probably by a chartered accountant, that the tax system breathes through its loopholes—so if we are finally closing all the loopholes, I do not know what the implications are for the tax scheme. All I know is that we now live in a world marketplace where there is fierce competition in the provision of goods and services. That competition is now extending to tax regimes as well. It is interesting that today Estonia has an extremely simple flat-tax system, designed mainly to encourage inward investment into that country. It has been copied by a number of other countries in eastern Europe, and indeed by Russia, and I suspect that we will not be able to insulate ourselves from needing a simple low-tax system if this country is to remain competitive.